Mike Kelly on Free Trade

Impose tariffs against countries which manipulate currency.

Kelly signed Currency Reform for Fair Trade Act

Amends the Tariff Act of 1930 to include as a "countervailable subsidy" requiring action under a countervailing duty or antidumping duty proceeding the benefit conferred on merchandise imported into the US from foreign countries with fundamentally undervalued currency.

Defines "benefit conferred" as the difference between:

the amount of currency provided by a foreign country in which the subject merchandise is produced; and

the amount of currency such country would have provided if the real effective exchange rate of its currency were not fundamentally undervalued.

Determines that the currency of a foreign country is fundamentally undervalued if for an 18-month period:

the government of the country engages in protracted, large-scale intervention in one or more foreign exchange markets

the country's real effective exchange rate is undervalued by at least 5%

the country has experienced significant and persistent global current account
surpluses; and

the country's government has foreign asset reserves exceeding the amount necessary to repay all its debt obligations.

[Explanatory note from Wikipedia.com "Exchange Rate"]:

Between 1994 and 2005, the Chinese yuan renminbi was pegged to the US dollar at RMB 8.28 to $1. Countries may gain an advantage in international trade if they manipulate the value of their currency by artificially keeping its value low. It is argued that China has succeeded in doing this over a long period of time. However, a 2005 appreciation of the Yuan by 22% was followed by a 39% increase in Chinese imports to the US. In 2010, other nations, including Japan & Brazil, attempted to devalue their currency in the hopes of subsidizing cheap exports and bolstering their ailing economies. A low exchange rate lowers the price of a country's goods for consumers in other countries but raises the price of imported goods for consumers in the manipulating country.

Proponent's argument for bill:(Senators' opinions reported on politico.com) "We subsidize a handful of wealthy sugar growers at the expense of everybody in America," said Sen. Patrick Toomey (R-Pa.), whose home state boasts the chocolate giant, Hershey's. Sen. Heidi Heitkamp (D-N.D.), warned her colleagues against unraveling the commodity coalition behind the farm bill: "We forget that this is much bigger than a sugar program.
It's much bigger than any one single commodity. When you single out one commodity, you threaten the effectiveness of the overall farm bill."

Opponent's argument against bill:(Food and Business News, May 2013): Users claim the sugar program nearly doubles the price of sugar to US consumers and has resulted in lost jobs as some candy manufacturers have moved operations to other countries. Producers claim the program has resulted in more stable sugar supplies, provides a safety net for growers and that world prices are often lower because of subsidies in origin countries, which would put US growers at a disadvantage should import restrictions be lifted. Producers also note that US sugar prices have declined more than 50% from late 2011 highs. They also maintain that jobs have been lost or moved out of the US for reasons other than sugar prices, mainly labor and health care costs, noting that candy makers' profits have been strong in recent years.

Ratings by USA*Engage indicate support for trade engagement or trade sanctions. The organization's self-description: "USA*Engage is concerned about the proliferation of unilateral foreign policy sanctions at the federal, state and local level. Despite the fact that broad trade-based unilateral sanctions rarely achieve our foreign policy goals, they continue to have political appeal. Unilateral sanctions give the impression that the United States is 'doing something,' while American workers, farmers and businesses absorb the costs."

USA*Engage at Work

Developing the Case: USA*Engage explains the benefits of economic engagement, and the high cost of sanctions for American exports, investment and jobs.

Education: We recruit respected foreign policy and economic experts to speak out against sanctions, actively engage the media and provide outreach to key target states and Congressional districts.

Contacting Government Officials: USA*Engage directly contacts Congressional, Administration, state and local officials.